Whether GST ITC on Mobile Phone & Mobile Bill be availed?
GST ITC on a mobile phone can be availed if it purchased for the furtherance of business. Also, the four eligibility conditions mentioned in Section 16 of CGST Act, 2017 must be fulfilled. The four conditions are as follows.
- Possess tax invoice/debit note or any other document.
- Goods and Services are received by him.
- The tax has been paid to the government either by Cash or Input credit.
- He has furnished the return under Section 39.
Section 17(5) of CGST Act,2017 discusses blocked credit (ineligible GST credit) transactions on which GST credit cannot be claimed.
‘Purchase of a Mobile phone is not a restricted credit under Section 17(5) of CGST Act.
The term furtherance of business has not been defined under the Act but in common parlance, it can be interpreted as any good or service which is utilized exclusively for business purpose.
Hence, such GST credit can be availed by the taxpayer.
Input Credit on Mobile Bill under GST
Many companies provide Postpaid telephone services to employees. The invoice is in the name of the employee or director sometimes and the GSTIN number of the company is mentioned. Whether the Input Credit on such invoices be claimed?
Under GST, to claim Input credit recipient shall have a valid tax invoice (mentioning the GSTIN and legal name of the recipient).
To resolve this issue, companies have taken Mobile connections in their own name, and services are either used by employees or directors.
For proprietors, GST credit can be availed if used exclusively for business purposes.
Frequently Asked Questions
To claim GST Credit, the tax invoice should be in the name of the taxpayer and his GSTIN number should be added. In this case, either the invoice should be canceled or amended.
If the GST credit of the mobile phone is not appearing in GSTR-2A, then you cannot claim the full amount of Input credit in your GST Return (GSTR-3B). This can be due to the following reasons.
- GST number not provided to the vendor.
- Incorrect GST number provided to the vendor.
- The vendor did not fill his GST return on time.
The taxpayer needs to discuss this issue with the vendor and ask him to rectify his mistake of not filing the return or amend the invoice.
Business promotion activities like Gifts or any other activity that is not for furtherance of business. The input credit on such Mobile phones should not be claimed.
In case the taxpayer is a supplier of exempted services or goods, then such taxpayer cannot claim the input tax credit on goods and services received.
The input tax credit can be taken for goods and services which are used for the furtherance of business. Using Mobile phones and cars for personal use does not mean furtherance of business. Hence, credit cannot be claimed.
Akash Arora is a Chartered Accountant by profession and the founder of this website. His expertise areas include compliance with Goods and Service tax and Direct taxes in India. He has written more than 70+ blogs on GST and Direct tax.
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